Investor Relations

Press Release

View printer-friendly version

<<  Back

Generac Reports Record Quarterly Results

Strong residential product demand continues, driving increased outlook for 2019

WAUKESHA, Wis., Oct. 31, 2019 (GLOBE NEWSWIRE) -- Generac Holdings Inc. (NYSE: GNRC) (“Generac” or the “Company”), a leading global designer and manufacturer of energy solutions and other power products, today reported financial results for its third quarter ended September 30, 2019.    

Third Quarter 2019 Highlights

  • Net sales increased 6.9% to $601.1 million during the third quarter of 2019 as compared to $562.4 million in the prior-year third quarter.  Core sales growth, which excludes both the impact of acquisitions and foreign currency, was also approximately 7%.    
    • Residential product sales increased 7.4% to $335.0 million as compared to $311.9 million last year, with core sales growth of approximately 7%. 
    • Commercial & Industrial (“C&I”) product sales increased 4.1% to $214.9 million as compared to $206.4 million in the prior year, with core sales growth of approximately 5%.
  • Net income attributable to the Company during the third quarter was $75.6 million, or $1.18 per share, as compared to $75.8 million, or $1.11 per share, for the same period of 2018.  See accompanying reconciliation schedules for related earnings per share calculations.
  • Adjusted net income attributable to the Company, as defined in the accompanying reconciliation schedules, was $90.0 million, or $1.43 per share, as compared to $89.1 million, or $1.43 per share, in the third quarter of 2018.
  • Adjusted EBITDA before deducting for noncontrolling interests, as defined in the accompanying reconciliation schedules, was $126.0 million, or 21.0% of net sales, as compared to $124.5 million, or 22.1% of net sales, in the prior year.
  • Cash flow from operations was $111.2 million as compared to $59.3 million in the prior year quarter.  Free cash flow, as defined in the accompanying reconciliation schedules, was $100.8 million as compared to $47.0 million in the third quarter of 2018.
  • The Company is increasing its full-year 2019 sales growth guidance to approximately 8 to 9% with Adjusted EBITDA margins, before deducting for non-controlling interests, of approximately 20.5%.

“We are pleased with our results for the third quarter of 2019 as we posted all-time record net sales and adjusted EBITDA as a result of continued strong growth across various product categories,” said Aaron Jagdfeld, President and Chief Executive Officer.  “Our performance in 2019 demonstrates the powerful secular growth opportunities around an aging electrical grid in the United States that is more susceptible to power outages due to a changing climate, the increasing penetration of natural gas power generation globally, and the importance of reliable telecommunication networks.  In addition, with the growing threat of utility shut-offs in California, interest in our back-up power solutions is at all-time high.  Finally, we are quickly scaling our Clean Energy product portfolio, supply chain, and go-to-market strategies to take advantage of the rapidly developing markets for energy monitoring, management and storage, and intend to launch our new product line in the fourth quarter.”

Additional Third Quarter 2019 Consolidated Highlights

Gross profit margin was 36.2% compared to 35.6% in the prior-year third quarter.  Pricing actions and favorable sales mix, as well as lower realized commodity and currency input costs, were partially offset by increased regulatory tariffs.

Operating expenses increased $18.1 million, or 19.3%, as compared to the third quarter of 2018.  The increase was primarily driven by additional employee headcount related to strategic initiatives, higher marketing and promotional spend, recurring operating expenses from recent acquisitions and higher intangible amortization expenses.

Provision for income taxes for the current year quarter was $20.1 million, or an effective tax rate of 21.1%, as compared to $20.1 million, or a 20.8% effective tax rate, for the prior year.

Cash flow from operations was $111.2 million as compared to $59.3 million in the prior year quarter.  Free cash flow, as defined in the accompanying reconciliation schedules, was $100.8 million as compared to $47.0 million in the third quarter of 2018.  Improved working capital efficiency in the current year, as well as additional pension funding and interest payments in the prior year, drove the increase.

Business Segment Results

Domestic Segment

Domestic segment sales increased 9.2% to $498.2 million as compared to $456.1 million in the prior year quarter.  Core sales growth, which excludes the impact of the Neurio and Pika acquisitions, was approximately 8.5%.  The current year quarter experienced strong growth in shipments of home standby generators given continued strong end market conditions, while portable generator shipments were approximately flat compared to the prior year.  In addition, C&I stationary generator shipments were also strong during the quarter primarily with our natural gas and telecom products.  The overall Domestic segment growth was partially offset by lower shipments of C&I mobile products to national rental account customers. 

Adjusted EBITDA for the segment was $121.2 million, or 24.3% of net sales, as compared to $117.1 million in the prior year, or 25.7% of net sales.  Pricing initiatives and favorable sales mix, improved commodity and currency input costs, and fixed operating cost leverage were more than offset by the aforementioned regulatory tariffs and higher operating expenses.  

International Segment

International segment sales decreased 3.1% to $103.0 million as compared to $106.3 million in the prior year quarter.  Core sales, which excludes the unfavorable impact of currency and the impact of the Captiva acquisition, was approximately flat compared to the prior year as geopolitical headwinds caused economic softness in certain regions of the world.

Adjusted EBITDA for the segment, before deducting for noncontrolling interests, was $4.7 million, or 4.6% of net sales, as compared to $7.4 million, or 6.9% of net sales, in the prior year.  Unfavorable sales mix and incremental operating expense investment contributed to the decline.

Updated 2019 Outlook

The Company is increasing its full-year 2019 guidance for revenue growth reflecting stronger end market demand for residential products, partially offset by slowing commercial & industrial activity.  We are now raising our full-year net sales growth to approximately 8 to 9%, with core sales growth now expected to be approximately 7% compared to the prior year. 

Net income margin, before deducting for noncontrolling interests, is now expected to be approximately 11.5% for the full-year 2019, with corresponding Adjusted EBITDA margin of approximately 20.5%. 

Despite the slower start to the year, Operating and Free Cash Flow generation for the full year is still expected to be strong, with the conversion of adjusted net income to free cash flow expected to be approximately 80%.

Conference Call and Webcast

Generac management will hold a conference call at 9:00 a.m. EDT on Thursday, October 31, 2019 to discuss third quarter 2019 operating results. The conference call can be accessed by dialing (866) 415-3113 (domestic) or +1 (678) 509-7544 (international) and entering passcode 5737459.

The conference call will also be webcast simultaneously on Generac's website (http://www.generac.com), accessed under the Investor Relations link. The webcast link will be made available on the Company’s website prior to the start of the call within the Events section of the Investor Relations website.

Following the live webcast, a replay will be available on the Company's website. A telephonic replay will also be available approximately two hours after the call and can be accessed by dialing (855) 859-2056 (domestic) or +1 (404) 537-3406 (international) and entering passcode 5737459. The telephonic replay will be available for 7 days.
               
About Generac

Founded in 1959, Generac is a leading designer and manufacturer of energy solutions and other power products.  As an industry leader serving residential, light commercial, and industrial markets, Generac's products and solutions are available globally through a broad network of independent dealers, distributors, retailers, wholesalers and equipment rental companies, as well as sold direct to certain end user customers. 

Forward-looking Information

Certain statements contained in this news release, as well as other information provided from time to time by Generac Holdings Inc. or its employees, may contain forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Forward-looking statements give Generac's current expectations and projections relating to the Company's financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "forecast," "project," "plan," "intend," "believe," "confident," "may," "should," "can have," "likely," "future," “optimistic” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.

Any such forward looking statements are not guarantees of performance or results, and involve risks, uncertainties (some of which are beyond the Company's control) and assumptions. Although Generac believes any forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Generac's actual financial results and cause them to differ materially from those anticipated in any forward-looking statements, including:

  • frequency and duration of power outages impacting demand for our products;
  • availability, cost and quality of raw materials and key components and labor needed in producing our products;
  • the impact on our results of possible fluctuations in interest rates, foreign currency exchange rates, commodities, product mix and regulatory tariffs;
  • the possibility that the expected synergies, efficiencies and cost savings of our acquisitions will not be realized, or will not be realized within the expected time period;
  • the risk that our acquisitions will not be integrated successfully;
  • difficulties we may encounter as our business expands globally or into new markets;
  • our dependence on our distribution network;
  • our ability to invest in, develop or adapt to changing technologies and manufacturing techniques;
  • loss of our key management and employees;
  • increase in product and other liability claims or recalls;
  • failures or security breaches of our networks or information technology systems; and
  • changes in environmental, health and safety, or product compliance laws and regulations affecting our products or operations.

Should one or more of these risks or uncertainties materialize, Generac's actual results may vary in material respects from those projected in any forward-looking statements. A detailed discussion of these and other factors that may affect future results is contained in Generac's filings with the U.S. Securities and Exchange Commission (“SEC”), particularly in the Risk Factors section of the 2018 Annual Report on Form 10-K and in its periodic reports on Form 10-Q. Stockholders, potential investors and other readers should consider these factors carefully in evaluating the forward-looking statements.

Any forward-looking statement made by Generac in this press release speaks only as of the date on which it is made.  Generac undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Non-GAAP Financial Metrics

Core Sales

The Company references core sales to further supplement Generac's condensed consolidated financial statements presented in accordance with U.S. GAAP.  Core sales excludes the impact of acquisitions and fluctuations in foreign currency translation.  Management believes that core sales facilitates easier and more meaningful comparison of net sales performance with prior and future periods.

Adjusted EBITDA

The computation of adjusted EBITDA attributable to the Company is based on the definition of EBITDA contained in Generac's credit agreement dated as of May 31, 2013, as amended.  To supplement the Company's condensed consolidated financial statements presented in accordance with U.S. GAAP, Generac provides a summary to show the computation of adjusted EBITDA, which excludes the impact of noncontrolling interests, taking into account certain charges and gains that were recognized during the periods presented. 

Adjusted Net Income

To further supplement Generac's condensed consolidated financial statements presented in accordance with U.S. GAAP, the Company provides a summary to show the computation of adjusted net income attributable to the Company. Adjusted net income attributable to the Company is defined as net income before noncontrolling interests and provision for income taxes adjusted for the following items: cash income tax expense, amortization of intangible assets, amortization of deferred financing costs and original issue discount related to the Company's debt, intangible impairment charges, certain transaction costs and other purchase accounting adjustments, losses on extinguishment of debt, business optimization expenses, certain other non-cash gains and losses, and adjusted net income attributable to non-controlling interests.

Free Cash Flow

In addition, we reference free cash flow to further supplement Generac's condensed consolidated financial statements presented in accordance with U.S. GAAP.  Free cash flow is defined as net cash provided by operating activities, plus proceeds from beneficial interests in securitization transactions, less expenditures for property and equipment, and is intended to be a measure of operational cash flow taking into account additional capital expenditure investment into the business.

The presentation of this additional information is not meant to be considered in isolation of, or as a substitute for, results prepared in accordance with U.S. GAAP.  Please see the accompanying Reconciliation Schedules and our SEC filings for additional discussion of the basis for Generac's reporting of Non-GAAP financial measures, which includes why the Company believes these measures provide useful information to investors and the additional purposes for which management uses the non-GAAP financial information.

SOURCE: Generac Holdings Inc.

CONTACT:
York Ragen
Chief Financial Officer
(262) 506-6064
InvestorRelations@generac.com

Generac Holdings Inc.
Condensed Consolidated Statements of Comprehensive Income
(U.S. Dollars in Thousands, Except Share and Per Share Data)
(Unaudited)
           
  Three Months Ended September 30,   Nine Months Ended September 30,
    2019       2018       2019       2018  
               
Net sales $ 601,135     $ 562,388     $ 1,613,404     $ 1,460,060  
Costs of goods sold   383,618       362,054       1,037,874       939,326  
Gross profit   217,517       200,334       575,530       520,734  
               
Operating expenses:              
Selling and service   59,356       48,985       158,954       141,874  
Research and development   17,603       13,653       48,906       38,122  
General and administrative   27,596       25,499       80,016       75,613  
Amortization of intangibles   7,406       5,678       19,999       16,792  
Total operating expenses   111,961       93,815       307,875       272,401  
Income from operations   105,556       106,519       267,655       248,333  
               
Other (expense) income:              
Interest expense   (10,704 )     (9,824 )     (31,428 )     (30,939 )
Investment income   523       382       1,889       1,095  
Loss on extinguishment of debt                     (1,332 )
Other, net   (414 )     (483 )     (1,868 )     (2,764 )
Total other expense, net   (10,595 )     (9,925 )     (31,407 )     (33,940 )
               
Income before provision for income taxes   94,961       96,594       236,248       214,393  
Provision for income taxes   20,064       20,072       53,876       49,870  
Net income   74,897       76,522       182,372       164,523  
Net (loss) income attributable to noncontrolling interests   (677 )     746       (21 )     1,841  
Net income attributable to Generac Holdings Inc. $ 75,574     $ 75,776     $ 182,393     $ 162,682  
               
Net income attributable to common shareholders per common share - basic: $ 1.20     $ 1.12     $ 2.95     $ 2.36  
Weighted average common shares outstanding - basic:   61,973,447       61,579,564       61,878,500       61,659,817  
               
Net income attributable to common shareholders per common share - diluted: $ 1.18     $ 1.11     $ 2.92     $ 2.34  
Weighted average common shares outstanding - diluted:   62,770,592       62,220,298       62,519,205       62,266,140  
               
Comprehensive income attributable to Generac Holdings Inc. $ 64,904     $ 80,768     $ 161,828     $ 173,355  
               



Generac Holdings Inc.  
Condensed Consolidated Balance Sheets  
(U.S. Dollars in Thousands, Except Share and Per Share Data)  
(Unaudited)  
         
  September 30,   December 31,  
    2019       2018    
Assets        
Current assets:        
Cash and cash equivalents $ 216,038     $ 224,482    
Accounts receivable, less allowance for doubtful accounts   373,591       326,133    
Inventories   517,232       544,750    
Prepaid expenses and other assets   30,570       25,404    
Total current assets   1,137,431       1,120,769    
         
Property and equipment, net   303,288       278,929    
         
Customer lists, net   55,649       61,194    
Patents, net   75,781       29,970    
Other intangible assets, net   11,809       3,043    
Tradenames, net   149,155       152,283    
Goodwill   811,914       764,655    
Deferred income taxes   3,217       163    
Operating lease and other assets   45,877       15,308    
Total assets $ 2,594,121     $ 2,426,314    
         
Liabilities and stockholders’ equity        
Current liabilities:        
Short-term borrowings $ 66,985     $ 45,583    
Accounts payable   241,290       328,091    
Accrued wages and employee benefits   37,401       40,819    
Other accrued liabilities   127,786       144,236    
Current portion of long-term borrowings and finance lease obligations   2,554       1,977    
Total current liabilities   476,016       560,706    
         
Long-term borrowings and finance lease obligations   884,315       876,396    
Deferred income taxes   92,520       71,300    
Operating lease and other long-term liabilities   145,491       95,647    
Total liabilities   1,598,342       1,604,049    
         
Redeemable noncontrolling interest   56,564       61,004    
         
Stockholders’ equity:        
Common stock, par value $0.01, 500,000,000 shares authorized, 71,640,792 and 71,186,418        
shares issued at September 30, 2019 and December 31, 2018, respectively   716       712    
Additional paid-in capital   492,671       476,116    
Treasury stock, at cost   (324,351 )     (321,473 )  
Excess purchase price over predecessor basis   (202,116 )     (202,116 )  
Retained earnings   1,013,707       831,123    
Accumulated other comprehensive loss   (46,363 )     (23,813 )  
Stockholders’ equity attributable to Generac Holdings Inc.   934,264       760,549    
Noncontrolling interests   4,951       712    
Total stockholders’ equity   939,215       761,261    
Total liabilities and stockholders’ equity $ 2,594,121     $ 2,426,314    



Generac Holdings Inc.
Condensed Consolidated Statements of Cash Flows
(U.S. Dollars in Thousands)
(Unaudited)
       
  Nine Months Ended September 30,
   2019     2018 
Operating activities      
Net income $ 182,372     $ 164,523  
Adjustment to reconcile net income to net cash provided by operating activities:      
Depreciation   22,842       18,332  
Amortization of intangible assets   19,999       16,792  
Amortization of original issue discount and deferred financing costs   3,597       3,554  
Loss on extinguishment of debt         1,332  
Deferred income taxes   19,514       17,218  
Share-based compensation expense   11,477       9,910  
Other   557       1,249  
Net changes in operating assets and liabilities:      
Accounts receivable   (45,543 )     (55,649 )
Inventories   27,190       (99,957 )
Other assets   1,488       (16,488 )
Accounts payable   (83,174 )     47,559  
Accrued wages and employee benefits   (7,517 )     13,044  
Other accrued liabilities   (17,092 )     18,011  
Excess tax benefits from equity awards   (1,908 )     (432 )
Net cash provided by operating activities   133,802       138,998  
       
Investing activities      
Proceeds from sale of property and equipment   83       213  
Proceeds from beneficial interests in securitization transactions   2,036       2,825  
Expenditures for property and equipment   (45,447 )     (25,577 )
Acquisition of business, net of cash acquired   (120,863 )     (71,926 )
Net cash used in investing activities   (164,191 )     (94,465 )
       
Financing activities      
Proceeds from short-term borrowings   68,802       28,332  
Proceeds from long-term borrowings         51,425  
Repayments of short-term borrowings   (45,437 )     (12,478 )
Repayments of long-term borrowings and finance lease obligations   (3,110 )     (51,164 )
Stock repurchases         (25,656 )
Cash dividends paid to noncontrolling interest of subsidiary   (285 )     (314 )
Payment of debt issuance costs          (1,702 )
Taxes paid related to equity awards   (5,749 )     (2,777 )
Proceeds from the exercise of stock options   7,957       5,191  
Net cash provided by (used in) financing activities   22,178       (9,143 )
       
Effect of exchange rate changes on cash and cash equivalents   (233 )     139  
       
Net (decrease) increase in cash and cash equivalents   (8,444 )     35,529  
Cash and cash equivalents at beginning of period   224,482       138,472  
Cash and cash equivalents at end of period $ 216,038     $ 174,001  
       



Generac Holdings Inc.  
Segment Reporting and Product Class Information  
(U.S. Dollars in Thousands)  
(Unaudited)  
                   
    Net Sales  
    Three Months Ended September 30,   Nine Months Ended September 30,  
Reportable Segments  2019    2018    2019    2018  
Domestic (1) $ 498,163   $ 456,132   $ 1,283,348   $ 1,142,487  
International   102,972     106,256     330,056     317,573  
Total net sales $ 601,135   $ 562,388   $ 1,613,404   $ 1,460,060  
                   
Product Classes                
Residential products $ 335,029   $ 311,918   $ 821,233   $ 748,790  
Commercial & industrial products   214,905     206,366     654,458     597,119  
Other (1)   51,201     44,104     137,713     114,151  
Total net sales $ 601,135   $ 562,388   $ 1,613,404   $ 1,460,060  
                   
    Adjusted EBITDA  
    Three Months Ended September 30,   Nine Months Ended September 30,  
      2019     2018     2019     2018  
Domestic $ 121,217   $ 117,108   $ 306,723   $ 273,185  
International   4,736     7,366     18,244     25,300  
Total adjusted EBITDA (2) $ 125,953   $ 124,474   $ 324,967   $ 298,485  
                   
(1) In accordance with ASU 2014-09, Revenue from Contracts with Customers, extended warranty revenues are reported within net sales in the condensed consolidated statements of comprehensive income. Previously, these amounts were reported net within selling and service expense on the condensed consolidated statements of comprehensive income, in amounts that were not material. To report extended warranty in accordance with ASU 2014-09, the net sales and gross profit amounts for the three months ended September 30, 2018 have been revised by $2,873 and $2,449, respectively, and the net sales and gross profit amounts for the nine months ended September 30, 2018 have been revised by $7,962 and $6,604, respectively, from the amounts previously reported for the third quarter of 2018, with an equal offset to selling and service expenses. The revisions impacted the Domestic segment and the Other product class. There was no impact to income from operations, net income or comprehensive income, earnings per share, the condensed consolidated balance sheets, the condensed consolidated statements of stockholders’ equity, or the condensed consolidated statements of cash flows.  
                   
(2) See reconciliation of Adjusted EBITDA to Net income attributable to Generac Holdings Inc. on the following reconciliation schedule.  


Generac Holdings Inc.  
Reconciliation Schedules  
(U.S. Dollars in Thousands, Except Share and Per Share Data)  
(Unaudited)  
                       
Net income to Adjusted EBITDA reconciliation                
        Three Months Ended September 30,   Nine Months Ended September 30,  
         2019     2018     2019     2018   
                       
Net income attributable to Generac Holdings Inc. $ 75,574     $ 75,776     $ 182,393     $ 162,682    
Net (loss) income attributable to noncontrolling interests   (677 )     746       (21 )     1,841    
Net income         74,897       76,522       182,372       164,523    
Interest expense       10,704       9,824       31,428       30,939    
Depreciation and amortization     15,494       11,841       42,841       35,124    
Provision for income taxes     20,064       20,072       53,876       49,870    
Non-cash write-down and other adjustments (1)   347       900       673       3,522    
Non-cash share-based compensation expense (2)   3,549       2,919       11,477       9,910    
Loss on extinguishment of debt               -       1,332    
Transaction costs and credit facility fees (3)   358       1,767       2,047       2,470    
Business optimization expenses (4)     567       583       809       750    
Other         (27 )     46       (556 )     45    
Adjusted EBITDA       125,953       124,474       324,967       298,485    
Adjusted EBITDA attributable to noncontrolling interests   909       1,454       3,722       5,633    
Adjusted EBITDA attributable to Generac Holdings Inc. $ 125,044     $ 123,020     $ 321,245     $ 292,852    
                       
(1) Includes certain foreign currency and purchase accounting related adjustments, gains/losses on disposals of assets and unrealized mark-to-market adjustments on commodity contracts. A full description of these and the other reconciliation adjustments contained in these schedules is included in Generac's SEC filings.          
                       
(2) Represents share-based compensation expense to account for stock options, restricted stock and other stock awards over their respective vesting periods.          
                       
(3) Represents transaction costs incurred directly in connection with any investment, as defined in our credit agreement, equity issuance or debt issuance or refinancing, together with certain fees relating to our senior secured credit facilities.          
                       
(4) Represents severance and other non-recurring restructuring charges related to the consolidation of certain of our facilities.          
                       
Net income to Adjusted net income reconciliation                
        Three Months Ended September 30,   Nine Months Ended September 30,  
         2019     2018     2019     2018   
                       
Net income attributable to Generac Holdings Inc. $ 75,574     $ 75,776     $ 182,393     $ 162,682    
Net (loss) income attributable to noncontrolling interests   (677 )     746       (21 )     1,841    
Net income         74,897       76,522       182,372       164,523    
Provision for income taxes     20,064       20,072       53,876       49,870    
Income before provision for income taxes   94,961       96,594       236,248       214,393    
Amortization of intangible assets     7,406       5,678       19,999       16,792    
Amortization of deferred finance costs and original issue discount   1,221       1,187       3,597       3,554    
Loss on extinguishment of debt               -       1,332    
Transaction costs and other purchase accounting adjustments (5)   165       702       1,373       1,516    
Business optimization expenses (4)     567       583       809       750    
Adjusted net income before provision for income taxes   104,320       104,744       262,026       238,337    
Cash income tax expense (6)     (15,083 )     (15,185 )     (39,698 )     (31,709 )  
Adjusted net income       89,237       89,559       222,328       206,628    
Adjusted net income attributable to noncontrolling interests   (738 )     447       958       2,491    
Adjusted net income attributable to Generac Holdings Inc. $ 89,975     $ 89,112     $ 221,370     $ 204,137    
                       
Adjusted net income attributable to Generac Holdings Inc. per                
  common share - diluted:   $ 1.43     $ 1.43     $ 3.54     $ 3.28    
Weighted average common shares outstanding - diluted:   62,770,592       62,220,298       62,519,205       62,266,140    
                       
(5) Represents transaction costs incurred directly in connection with any investment, as defined in our credit agreement, equity issuance or debt issuance or refinancing, and certain purchase accounting adjustments.          
                       
(6) Amounts for the three and nine months ended September 30, 2019 are now based on an anticipated cash income tax rate of approximately 17% respectively for the full year ended 2019. Amounts for the three and nine months ended September 30, 2018 are based on an anticipated cash income tax rate of approximately 15% for the full year ended 2018. Cash income tax expense for the respective periods is based on the projected taxable income and corresponding cash tax rate for the full year after considering the effects of current and deferred income tax items, and is calculated for each respective period by applying the derived full year cash tax rate to the period’s pretax income.          
                       
Free Cash Flow Reconciliation                  
        Three Months Ended September 30,   Nine Months Ended September 30,  
         2019     2018     2019     2018   
                       
Net cash provided by operating activities $ 111,188     $ 59,341     $ 133,802     $ 138,998    
Proceeds from beneficial interests in securitization transactions   640       896       2,036       2,825    
Expenditures for property and equipment   (11,071 )     (13,251 )     (45,447 )     (25,577 )  
Free cash flow     $ 100,757     $ 46,986     $ 90,391     $ 116,246    
                       
GAAP Earnings Per Share                  
        Three Months Ended September 30,   Nine Months Ended September 30,  
         2019     2018     2019     2018   
Numerator                      
Net income attributable to Generac Holdings Inc. $ 75,574     $ 75,776     $ 182,393     $ 162,682    
Redeemable noncontrolling interest redemption value adjustment   (1,485 )     (6,912 )     191       (16,882 )  
Net income attributable to common shareholders $ 74,089     $ 68,864     $ 182,584     $ 145,800    
                       
Denominator                    
Weighted average shares, basic     61,973,447       61,579,564       61,878,500       61,659,817    
Dilutive effect of stock compensation awards   797,145       640,734       640,705       606,323    
Diluted shares       62,770,592       62,220,298       62,519,205       62,266,140    
                       
Net income attributable to common shareholders per share                
Basic       $ 1.20     $ 1.12     $ 2.95     $ 2.36    
Diluted       $ 1.18     $ 1.11     $ 2.92     $ 2.34    

 

 

GENERAC logo color low res.jpg

Source: Generac Holdings Inc